Regional radio stations Algoa FM and OFM were the star performers in an improved performance delivered by JSE-listed African Media Entertainment (AME), in the year to end-March 2023.

AME CEO Dave Tiltmann said on Friday the recovery in advertising revenue post the Covid-19 pandemic continued in the second half of the financial year, particularly for Algoa FM, which serves the Eastern Cape and Garden Route.

Tiltmann said OFM, which serves the Free State and Northern Cape, was slightly below pre-pandemic revenue levels.

“Algoa FM and OFM were our star performers and they managed to tick that box,” Tiltman said.

“In fact if you look at our sales performance as a group, through our sales house and our bases, we delivered better growth in revenue than the market average.”

“We’re really pleased about that,” he said.

Decent recovery 

AME chairperson Connie Molusi said national and direct sales collectively contributed to net radio revenue ending 12% above budget, which together with tight financial controls, resulted in Ebitda last experienced pre-Covid-19.

“This performance was achieved despite a magnitude of conditions, such as the severe water crisis, failing municipal infrastructure, disruptive power outages and rising inflation, which was further exacerbated by the State of Disaster, which was only lifted during April 2022,” Molusi said.

“During the period under review, audiences have grown, online engagement is on an upward trajectory and cash flow remains positive.”

Specialist media agency MediaHeads 360 had a difficult year, but ended the financial year with a profit – although the business fell short of achieving its 2023 target, with Ebitda 69% lower than the prior year.

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Tiltmann said this was largely on the back of its biggest project for the business in the year, which was delayed and fell out of the financial year.

He added that MediaHeads had one of the most exciting presentations at the group’s strategy sessions, and its focus in the last 12 months has been to grow and restructure the company to be more active in the television space.

However, the timing couldn’t have been worse with load shedding, he added, as it has obviously resulted in television suffering from audience losses.

“However, our focus was largely in the production of programming, where we sell sponsorships and programming material into it,” said Tiltmann.

New audio player 

Tiltmann said the group has embarked on an exciting collaborative project involving all its subsidiaries: Moneyweb, Algoa FM and OFM and a number of other audio brands it sells via United Stations.

“We are looking to launch an audio player into the market place in the next 30 days, which will be a first for South Africa. We are really excited about this project,” he said.

Moneyweb

Moneyweb achieved marginal growth in revenue of 8% year-on-year.

Tiltmann said there are three aspects to Moneyweb’s revenue – digital, radio and the non-traditional side – and costs had been well maintained.

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He said the digital side of the business did not achieve the revenue anticipated, but radio exceeded expectations, and the group believes there is a massive opportunity for non-traditional offerings, including ‘Click an Advisor’ and the Better Investment Conferences.

Economic environment

Tiltmann is cautiously optimistic about the year ahead.

He said the trading environment has deteriorated a little since the budgets were finalised at the start of 2023 due to the load shedding crisis and the Russia-Ukraine war, which has now raised the threat of potential sanctions.

“There are a lot of concerns that we have, but our brands are well established in their regional spaces and the strategy has been to focus on collaboration within the group across the five subsidiaries and the focus of our brands – including Moneyweb, Algoa FM and OFM – to be very strong on hyper-local information or hyper-specific information to their industry and audience.”

“That has really helped us build nice momentum, even in these difficult times,” he said.

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Tiltmann said third-party suppliers and rising input costs of each business in the group remain a challenge, adding that growth in revenue versus growth in costs is always a concern, particularly with the radio stations.

“Outside of human resources, the cost of the transmitter networks have been one of the major contributors to that,” he said.

Rising revenue

AME reported a 7% increase in revenue to R268.7 million in the year to end-March, from R250.8 million in the previous year.

Profitability recovered in line with the increase in revenue, resulting in a 16% improvement in operating profit to R46.2 million from R39.8 million.

Molusi said various revenue initiatives implemented over the last year, as well as increased market share, resulted in the improved performance.

Cash generated by group operating activities rose by 5.3% to R49.6 million from R47.1 million.

Divided declared

A final dividend per share of 250 cents was declared.

Profit for the year grew by 29% to R43.16 million from R33.43 million.

Together with the 100 cents per share interim dividend declared for the six months to end-September 2022, this boosted the total dividend per share for the full year to 350 cents per share, 25% higher than the 280 cents per share total dividend declared in the prior year.

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Earnings per share improved by 30% to 485.5 cents. Shares in AME rose 4.92% on Friday to close at R32 per share.